Matching of purchases with GSTR 3B

1. What if any invoice gets missed in GSTR 3B?

GSTR 3B return is a summary return and not an invoice level return as such GSTR 1, which carries the details of input tax credit availed on input goods and or services and the tax liability on the outward supply of goods and or services on provisional basis.

There is a high probability that an invoice may be failed to be recorded while filling GSTR 3B return as it is just a summary return and not invoice level return. Then in this case, if any amount in respect of any invoice is missed while filing GSTR 3B say for the month of July, then the tax payers have the option to further furnish the detail of the invoice at time of filing GSTR 1 and GSTR 2 for the month of July.

Although one say that such discrepancy will eventually get highlighted by itself as currently a summary data is being provided and there are good chances to miss any invoice, but on the other face of it there also lies a fact that in GSTR 1, invoice level data will be furnished and there will be rare chances of any line item getting missed.

Recent Updates: The Finance Ministry extended the deadline for filing summary sales return GSTR-3B for the month of September by five days to 25 October. With this extension, businesses which wish to claim Input Tax Credit (ITC) benefit for July 2017 - March 2018 period can do so till 25 October 2018. This will be last entry where in the tax payers are allowed to set right the figures of tax credits at it’s right value based on the invoices after which this registered will be closed for further matching with the auto populated GSTR 2A details of the recipient furnished by the supplier in his GSTR 1 return.

2. What if supplier does not pay GST

The question here arises about the availability of input tax credit where in the supplier does not pay the GST collected from the recipient of goods and or services.

Well the answers lie in the provisions provided under GST Act which clearly says that linking the event of tax payment by a supplier, to the availability of input credit to the buyer and not just the availability of a ‘matched genuine invoice’ is a wrong interpretation of law.

Under normal business circumstances, a transaction gets completed when the goods or services are delivered, invoices received, and the payments made against them. An indirect tax regime requires the supplier to act as an agent of the Government to charge the tax on the invoice, collect it, and remit it. In a value added tax regime (like GST), the buyer avails the input credit of the tax thus paid on the invoice, which has been paid to the supplier in good faith as per the directions of law.

To prevent fraudulent claims, either of non-existent invoices, or for amounts which are not as per the original invoice, the concept of invoice matching under GST has been introduced in the system. Therefore, even if the supplier does not pay the tax collected from recipient of goods and or services, it does not bar the recipient from availing the input tax credit.

3. What if any invoice gets missed in GSTR 1?

As of today, there is no provision under GST law for adding missing invoices in GSTR 1. However, the supplier making supplies and filing returns in Form GSTR 1 can ask the recipient of goods and or services who will be eligible to claim ITC against the missing invoice to act against such missing invoices in his GSTR 2 return.

The supplier must communicate with the recipient and ask him to include the captioned invoice in his GSTR 2 and once when it is done, it gets reflected in GSTR 1A of the supplier and on the acceptance of the same by the supplier, the invoice will get included in GSTR 1 of the supplier.

4. Process of matching purchases with GSTR 3B

The first step in matching purchase invoices with the GSTR 3B return filed is to compare the purchases available in your books with respect to GSTR 2A (available on GST portal) of the respective return period.

And the next step in this process is to identify the differences by manually matching each purchase invoice or identifying the invoices that are not available on GST portal or in the books.

The final step in this process is to act against such mismatches:

Resulting on account of mismatch in invoice issued and uploaded in GSTR 1 by supplier: The recipient has to contact the concerned supplier and ask them to upload the respective invoice in his latest GSTR 1 return which have not been filled yet by using the tile “Amendment B2B invoices”.

For invoices failed to be uploaded by supplier in his GSTR 1 return: The recipient can add such missing invoice in his GSTR 2 return and communicate such information to supplier to accept such invoice failed to be uploaded by him in his GSTR 1 return.

Resulting on account of invoices failed to be recorded in the books of accounts: Here the tax payer has to record such missing invoice in his books by passing an accounting entry to record such purchases and finally make an adjustment by adding such Input tax credit omitted to be recorded in GSTR 3B by adding the same in the latest GSTR 3B return to be filed.

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